By the numbers: US-based buy now, pay later (BNPL) company Affirm reported a 115% year over year (YoY) surge in gross merchandise volume (GMV) for its fiscal Q2 2022 quarter (ended December 31, 2021), per its earnings supplement—up strongly from the previous quarter.

• The number of active consumers soared 150% YoY, compared with a 97% increase in fiscal Q1. The number of active merchants skyrocketed 2,030% YoY—even more dramatic growth than Q1’s 1,468% YoY surge.
• Active consumer and merchant growth was fueled in part by Affirm’s new partnership with Amazon, which began shortly before the holiday season.

Tweeted too soon: Affirm’s earnings were accidentally released early in a tweet outlining quarterly performance that was sent out from the company’s official Twitter account. The company’s stock price rose slightly following the since-deleted tweet, which highlighted positive growth. But the price cratered after the company’s full results reported wider-than-expected losses.

How Affirm achieved GMV results: The holiday season helped buoy Affirm’s GMV thanks to its tie-ups with major brands like Amazon and Apple. Unlike last year, consumers were more likely to spend in-store and could’ve used Affirm’s virtual card solution. Total US holiday retail sales hit $1.147 trillion in 2021, per eMarketer forecasts from Insider Intelligence.

What’s next? Major issuers and card networks (including Mastercard) plan to launch BNPL products this year, which could make it even harder for Affirm to compete. But new tie-ups and features might relieve some competitive pressures by helping broaden its reach and encouraging spending.

• Last month, Affirm partnered with payment gateway Verifone to offer its flexible payment solutions through Verifone’s online and in-store merchants. Verifone is one of the largest payment providers in the world and works with more than 600,000 merchants. The tie-up can help Affirm scale its business and increase customer touchpoints. We forecast the number of US Affirm users will hit 7.1 million this year.
• And in January, Affirm launched a Chrome extension and its super app, which consolidates services like its savings accounts and shopping tools in one place. These offerings can help boost customer engagement, which might increase the likelihood of spending.

Related content: Interested in learning about key trends in the BNPL space? Check out the “Payment Methods and Funding Mechanisms” segment of our payments ecosystem report collection.